Lithuania at Fore of Gazprom Fight

When the European Commission announced Tuesday night that it is investigating Russia’s OAO Gazprom for potential abuse of its dominance in the natural gas markets of eight Central and Eastern European states, Lithuania likely rejoiced more than others. The tiny Baltic country has been at the forefront of the European Union’s struggle against overdependence on Russian natural gas supplied by state-owned Gazprom.

“This is very important, first of all for Lithuania,” Energy Minister Arvydas Sekmokas told Real Time Brussels in an interview Wednesday morning. Lithuania, along with several other small EU countries, depends on Russia for virtually all its gas supplies, putting Gazprom into an unusually strong position.

Because most gas reaches Europe by pipeline, prices are usually not determined by the market, but instead often set in long-term contracts and linked to average oil prices – arguably to prevent harsh fluctuations for consumers and to guarantee a return on the pipeline investment. Crucially, Gazprom also has a 37% stake in the Lithuania’s pipeline operator, which makes it even easier to prevent other companies from shipping gas to Lithuania.